By Ted Gotsch
Policy can be confusing, even for those who are tuned into the process. Lawmakers and regulators seem to speak their own technical language that, at times, makes it difficult to understand what they are trying to accomplish.
The Academy’s Public Policy department knows this challenge firsthand—after all, we sometimes get lost in the mire ourselves. Going forward, we will use this space in Contingencies to focus on relevant policy subjects. We’ll highlight how public policy affects actuaries, industry, and individuals, as well as the work the Academy’s volunteers are doing to serve the public and the actuarial profession. Our goal is to shed some light on a subject that is often not transparent.
In this inaugural column, we’re diving into H.R. 1, also known as the One Big Beautiful Bill Act[1] (OBBBA), which President Trump signed into law on July 4. The law touches upon many issues of interest to the Academy and the broader policy community, most notably in the health care[2] arena. Let’s take a closer look at some of the priority issues for actuaries and the Academy.
Health Care
In Medicaid and the commercial/individual insurance market (often referred to as the Affordable Care Act [ACA] market), the law makes significant changes expected to place a greater economic burden on states and the public. While Congress deliberated the various provisions within the law, the Academy’s Health Practice Council sent several comment letters to the House[3] and Senate[4] outlining the potential impacts on the Medicaid and ACA markets.
Garnering the most attention related to the Medicaid program are new work requirements, expected to reduce enrollment while raising administrative costs for the states. The law mandates that most non-disabled, non-elderly adults complete at least 80 hours of work or related activities each month, unless they are a student, pregnant, or serving as a caregiver.
Other modifications that will impact the program include limits on Medicaid provider taxes, which will tighten rules on health-care-related taxes used to draw down federal Medicaid funds; the phase-in of a lower cap on tax rates; and reduced state financing flexibility.
As the Academy noted in the July 1, 2025, comment letter, “Given how interwoven and connected the existing health insurance markets are within the U.S., it is particularly necessary to take into consideration the fiscal, population, and operational impacts that any potential reforms might have when assessing the desired budgetary outcomes. We share a common focus maintaining the crucial stability of the overall health care market, which includes the individual and small group markets, the Medicaid program, and the self-insured marketplace.”
While the Academy does not actively lobby on federal legislation, comment letters and conversations with key Congressional leadership and legislative staff help educate decision-makers and underscore the value actuaries bring to policy analysis and program impact evaluation. Being able to look at the entirety of the health insurance system and understand the potential short-, mid-, and long-term implications of various policy levers on affordability and access is one of the distinct strengths of the Academy’s volunteers.
Regarding the ACA, significant debate focused on improving market integrity, the annual premium adjustment percentage, actuarial value de minimis standards, and the status of the enhanced premium subsidies. Throughout the reconciliation process, the Academy’s volunteers and senior health fellow actively engaged with the key committees of jurisdiction and influential legislative staff.
As the Individual and Small Group Markets Committee noted in its June 3letter, “The Academy’s longstanding mission is to inform public policy deliberations in an objective and nonpartisan manner. The Committee shares the goal of promoting access, affordability, choice, and competition in the individual health insurance market. This market is governed by a framework of laws and regulations designed to support these objectives, including uniform market rules, premium tax credits, cost-sharing reductions, and consumer protections.”
More recently, the Health Practice Council consolidated several key resources for federal and state stakeholders in one place on the Academy’s website. With a variety of issue briefs, infographics, and policy papers on 2026 premium drivers,[5] market stability,[6] and the interconnectedness of health insurance markets,[7] they have made it easy for anyone to become better informed on the various policy levers that influence and impact the affordability and accessibility of the ACA marketplace.
Social Security
While not intended to have a direct impact on Social Security, the OBBBA includes language that has caused some confusion and calls for further review. Within the law, there is a provision that provides a temporary $6,000 tax deduction for Social Security recipients who are aged 65 or older and who earn less than $75,000 a year (under $150,000 for joint filers). This deduction would effectively reduce taxes for millions of seniors. An analysis[8] by the White House Council of Economic Advisers found that before OBBBA passed, 64% of seniors had exemptions and deductions exceeding their taxable Social Security income. With the passage of the law, the Council of Economic Advisers found that number increased to 88%.
It’s important to keep in mind that a tax break in place through 2029 is not the same as ending federal taxes on Social Security. Concerns have been raised that seniors and others may not fully understand that the OBBBA has not, in effect, ended taxes on Social Security benefits.
Meanwhile, the nonpartisan Committee for a Responsible Federal Budget (CRFB) estimates that the “senior bonus” and other tax changes in the bill will mean an annual reduction of approximately $30 billion in revenue for the Social Security program. This would accelerate the projected insolvency date for the Social Security OASI trust fund, moving it from early 2033 to late 2032. CRFB also estimates an additional 24% cut in benefits due to this change.[9]
The Academy’s Retirement Practice Council, which has been working with Congress and the administration on policy steps to address the solvency problem, continues to monitor proposed solutions. In addition to their 2023 issue brief, Reforming Social Security Sooner Rather than Later,[10]the Social Security Committee has also published its annual infographic[11] that outlines the financial state of the program and features key takeaways from the 2025 Social Security Trustees Report.
The bill includes numerous provisions that intersect with the policy priorities of the Academy and the actuarial profession. Covering everything from artificial intelligence (AI) to crop insurance, and from tax reform to workforce eligibility requirements for noncitizens, the law touches many aspects of both our professional and personal lives.
The true impact will continue to be analyzed and evaluated in the months ahead. While the bill may not have been everyone’s ideal solution to many policy questions and concerns that we have across the industry and financial security landscape, it does emphasize the need for—and value—of a balanced and objective source of truth for decision makers, the media, and other interested parties. The Academy and our volunteers remain a highly valued, highly motivated resource, offering insights, guiding paths forward in complicated scenarios, and reminding elected officials that understanding the pros and cons of every proposal is rarely straightforward.
Public policy touches and influences our lives every day. What the Academy does, on behalf of the public and the profession, is to offer some unique and valuable expertise to help cut through the political distractions. The OBBBA represents one of the most comprehensive legislative efforts in recent years, with far-reaching implications for health care, retirement security, AI, and more.
Fortunately for us—and for Congress—the Academy will continue to assess the impact of proposed and enacted laws, providing objective actuarial perspectives to policymakers and the public. It’s our mission—and our way—to help everyone better understand the process that is public policy.
Ted Gotsch is the policy content and publications manager at the American Academy of Actuaries.
Endnotes
- H.R. 1, One Big Beautiful Bill Act.
- “Health Provisions in the 2025 Federal Budget Reconciliation Bill”; KFF; July 8, 2025.
- Committees Comment to House on H.R. 1 Health Provisions; American Academy of Actuaries’ Medicaid Committee and Individual and Small Group Markets Committee; July 1, 2025.
- Committee Comments to Senate on House Budget Bill; American Academy of Actuaries’ Individual and Small Group Markets Committee; June 3, 2025.
- Drivers of 2026 Premium Changes, American Academy of Actuaries’ Individual and Small Group Markets Committee; July 2025.
- Strategies to Achieve Market Stability in the Individual Health Insurance Market; American Academy of Actuaries’ Individual and Small Group Markets Committee; July 2025.
- The Interconnectedness of Health Coverage Sources for the Under-65 Population; American Academy of Actuaries’ Individual and Small Group Markets Committee; July 2025.
- “No Tax on Social Security is a Reality in the One Big Beautiful Bill”; Office of the White House; July 1, 2025.
- “Retirees Face $18,100 Benefit Cut in 7 Years”; Committee for a Responsible Federal Government; July 24, 2025.
- Reforming Social Security Sooner Rather Than Later; American Academy of Actuaries’ Social Security Committee; October 2023.
- Highlights from the 2025 Social Security Trustees Report; American Academy of Actuaries’ Social Security Committee; June 26, 2025.